Wednesday, March 30, 2016

According toreports in the
Canadian media, an Ontario-based Catholic priest is under
investigation on suspicion of gambling away funds that had been set
aside to provide for refugees newly settled in Canada.

Father Amer Saka, a priest at the St. Joseph
Chaldean Catholic Church in London, Ontario, is suspected to have
lost roughly half a million Canadian dollars (equivalent to $380,000
U.S.) that had been entrusted to him by local families keen on
sponsoring new arrivals from the Middle East.

He lost all the
money by ‘Gambling,’" church's bishop, Emanuel Shaleta, told the Toronto Star. Seven to eight families had given
their donations to Saka. "They trusted him. They did not give it as a
gift. They were trusting the priest. They didn't ask for receipts," he
said.

Canada's government-led
program to give sanctuary to tens of thousands of Syrian and Iraqi refugees
involves the combined efforts of the state as well as private donations to
sponsor refugee arrivals. Saka was in charge of funds raised by the Hamilton
Diocese to sponsor 20 Iraqi refugees.

Wednesday, March 23, 2016

exposing the crisis in nonprofit
fraud leadership…a crisis of pervasive and monumental waste, fraud, abuse,
mismanagement, and malfeasance throughout the charitable sector which
costs taxpayers and contributors tens of billions of dollars annually;
and,

seeking reforms that will restore
the public’s lost confidence in the sector.

"Our legal systems and protections have not
caught up with the realities of the digital world," Puneet Manchanda, a professor of marketing at
the University of Michigan's Ross School of Business said. "The scammers will always be
ahead. The solution is regulation and education."

“They came to
do good and they did very well indeed (for themselves).”

Skunk of the Month is the twice-monthly designation
made by Nonprofit Imperative, the
organization dedicated to eliminating waste, fraud, abuse and mismanagement in
nonprofits and government. The Skunk of the Month award is given to
charities and government officials who show blatant disregard for the interests
and trust of contributors and taxpayers. This month’s example is:

When
Will The Vet Charity Malfeasance End? The Biggest Case…

Wounded
Warrior Project is the largest veteran’s charity in the country.Since 2009, the group raised nearly $1
billion.

It is
the latest veterans’ charity to get caught having questionable practices with
disregard for donor’s interests.

WWP
joins many similar veterans’ organizations that arenotoriouslypoor in their management practices.Nonprofit
Imperative has highlighted similar instances
that have taken place in the past. (see a few: here, here, here).NIhas probably uncovered approaching 100
similar questionable veteran organizations. (It is a tight race between vet
charities and cancer charities, particularly breast cancer, for the worst
charities)

The
Wounded Warrior Project spending on conferences and staff meetings was at $26
million in 2014, a startling increase from less than $2 million in 2010.

When
Fred and Dianne Kane, major donors heard about it, they have dedicated
themselves to a new cause: demanding reform at the organization. They are
demanding that the CEO, Steve Nardizzi, be fired. (According to(CBSNews), he is not the only large donor to do so.) But since
sources close to the organization say the board signs off on all major spending
decisions and also stays at five-star hotels on the organization’s dime. They
are too culpable.

“I don’t understand how an organization that has many veterans who value
honor and service and chain of command can be led by a guy like that.” “I feel
like I am representing all these people who have donated over the years, all
these seniors over 65 sending $19 a month, all these people on fixed incomes,”
saidFred Kane, one of its major fund-raisers who has raised more that
$325,000. “If no one is going to talk about this right now and it has to
be me, then it has to be me.”(nonprofit
quarterly)

In view of the adverse
publicity and a major downturn in contributions, theboard hired an external legal counsel and consulting
firm as forensic accounting consultants to conduct an independent and objective
review of the allegations reported in the media. This work has involved the
review of financial and other records, as well as interviews with former and
existing employees at all levels of the organization including members of
senior management and the Board of Directors.Reportedly,
the preliminary results of both a financial and policy audit are now in, and
the board yesterday fired not only CEO Steve Nardizzi, but also COO Al
Giordano.

The
board chair suggested that the issues described in the media were incorrect,
but the board nevertheless found the need to terminate the two. Look for a
significant settlement or lawsuit which will be paid for, most likely, by
contributions.

The
Daily Beast statesthe charity had a
quarter-million-dollar annual budget for candy and soda, and spent untold sums
on staff field trips and elaborately produced music videos promoting
executives.

A whistleblower said:
“The problems at WWP start at the top but this is a systemic problem that
permeates through the culture of the organization. Ultimately, the selfish
attitudes, egomaniacal actions, and self-interest led to donors being lied to
and veterans being used for personal gain.”

Mr.
Nardizzi, who earned nearly $500,000 annually, according to the group’s most
recent available tax filings, is a longtime
critic of charity
ratings used by watchdog groups like Charity Navigator and CharityWatch andserves on the steering committee of
the advisory board of the Charity Defense Council, which works to defend nonprofits
from accusations of wasteful spending.

The Wounded Warrior
Project stated that "80 percent of total expenditures (in 2013) went to
provide services andprograms to wounded service members and their
families, but Charity Navigator calculates that the organization actually spent
only 57.7 percent in 2013. CharityWatch pegs the amount at 54 percent.

The
group’s founder, a wounded Marine named John Melia, announced that he was
interested in returning to the organization, which he left in 2009 after a
dispute with Mr. Nardizzi and Mr. Giordano.

Employees
say Mr. Nardizzi vanished from view, refusing to talk to the news media,
stopping his weekly addresses to the staff, and even disappearing from the
halls of the group’s offices. One employee who did not want to speak
publicly because she feared being fired said “There was no one there to tell us
what was going on or how we were going to get through this.”

Where was the board?
Did the audit confirm reports that the board was enjoying the good life, also.

--------------------------------

Just in:The U.S
Attorney’s Office says a married couple in California started the Wounded
Marine Careers Foundation with the apparent intention to provide job training,
benefits and equipment for injured Marines returning from Iraq and Afghanistan.They were sentenced for embezzling
federal funds from a film school for wounded veterans they founded, a total of
$400,000.

Just
in: In Texas, a group of men claimed that their organization, United Soldiers
Outreach, LLC, would use these donations to send care packages to American
soldiers stationed abroad. It was a fake organization.

Charity Check Up:

Another Vet Org. Gets Caught

After two months, veterans organizations have received
$2.94 million of the $6 million presidential candidate Donald Trump said he
raised for former service members at anIowa rally in January,according toCNNandThe Washington Post.The
Trump campaign released details of the donations after thePosthad
contacted the 24 charities Mr. Trump identified as beneficiaries and accounted
for less than half of the money.

The bulk of the $6 million was raised from wealthy
associates of Mr. Trump's, some of whom gave directly to veterans groups in
response to his appeal. The Donald J. Trump Foundation, to which about $1.7
million in public donations were routed, has doled out about $1.1 million.

A Thought or Two:

Feds Raid On Tech Vender Probe

Three hundred FBI agents with search
warrants in hand entered multiple yeshivas and vendors’ offices in Rockland
County, demanding they account for technology purchases for which they
billed the federal government. A 2013 investigative reportfound that haredi Orthodox yeshivas, particularly Hasidic
ones, in Rockland County and Brooklyn disproportionately benefit from the
program even though few offer their students or teachers Internet access.
Orthodox schools that publicly eschew the Internet were awarded millions of
dollars for tech equipment and Internet wiring.

One school had been cited for
noncompliance, yet continued to be approved for millions of dollars of services
through E-rate. In 2011, it was approved for more E-rate funds than
any other Jewish school in New York State, and in 2013 it applied for, but
never received, $1.2 million for “internal connections” and “internal
connections maintenance” provided by a nearby company. One of the Rockland
County vendors raided was according to the Jewish Week’s 2013 reporting, one of
the largest E-rate service providers in the Jewish community. In 2011 it was
awarded more than $3 million in E-rate contracts, largely for Jewish clients,
and did more business in the Jewish sector than Verizon, Sprint and Nextel
combined.

Two General Accounting Office reports
have noted problems with the nonprofit’s “internal controls,” and several
multi-million-dollar fraud cases involving the company have been
exposed. (source)

1.State taking over
Federal responsibility: A bill at the Colorado
capitol would toughen the punishment for fraud involving charities. the
proposal, which just passed out of committee at the state capitol, a person
found guilty of charitable fraud would face a civil penalty of up to $10,000
for each violation, with no cap. Right now it’s $2,000 per incident with a
$500,000 cap. The measure is needed
because the federal government isn’t enforcing its charitable fraud laws.

2.A Greek Orthodox priest pleaded guilty to
embezzling more than $100,000 from his former parish in Wauwatosa (WI) He used it
for lavish dinners, jewelry for his wife and everyday expenses. He had been the
pastor at the church about 20 years.

3.Oasis Foundationexecutive
director has been sentenced to 21 months in prison on a federal charge stemming
from the embezzlement of over $1 million from the private charitable foundation
in Washington DC

4.The Downtown Pasco (WA) Development Authority (DPDA) will be
startingfresh in 2016 with bold
new plans to further improve the community after an embezzlement case left them
more than $100,000 in debt.A fraud rocked the nonprofit when
former DPDA Director Michael Goins was charged with embezzlement of more than
$90,000 in December 2015.The ongoing case has left the
groupfacing more than $70,000 in IRS taxes along with debt to at least 40
companies.

5.New York City Mayor Bill de Blasio said he has begun shutting
down the nonprofit group that was advancing his political agenda, a move that
comes just weeks after a government watchdog called for a probe into its
actions. His group,dubbed
the Campaign for One New York, was not bound by city campaign finance laws
and could accept unlimited contributions from donors. It used that money to
promote some of de Blasio's signature policy initiatives, includinguniversal
pre-Kand a rezoning plan
that would aid in his effort to build more affordable housing.

We
flagged these few examples of charity misdeeds:

1.Madison (IN) Gymnastics
and Cheer Corporation thousands

2.Eastern Carolina EMS $4500

3.Gloria’s Poker Palace and
Pocket Aces (MI) $17,000

4.Reaching Up and
Reaching Out (PA) $11,398

5.Care
Charities (NJ) $25,000

Political/public official chicanery(just a few):

1.Top
officials at the Northern Manhattan Perinatal Partnership (NMPP) gave
themselves hundreds of thousand dollars in “bonuses” at the same time they werefailing to deliver on a $4.3
million contract to carry out one of Mayor Bill de Blasio’s signature
initiativesto bring
community health care to city housing projects, a DNAinfo New York
investigation has found. The city’s Department of Health yanked its three-year
contract last November after just one year — but that did not stop its
executive director and his top aides from taking bonuses that virtually doubled
their salaries.The long-time NMPP
chief raked in at least $71,300 in additional “bonus” pay. The NMPP’s
chief financial officer jumped even more than the exec between December 2014
and last July — collecting at least $87,000. The nonprofit’s Human
Resources administrator also took in at least $23,900 in “bonus” payments, and
her niece, who served as the exec’s secretary, received $20,000, the financial
records show.

In all, the quartet divvied up
roughly $200,000 between December 2014 and last July, according to the
documents.

Records show that city Department
of Health and Mental Hygiene funds earmarked for an “infant mortality reduction
initiative” were used to pay bonuses to the exec and his CFO.

The contracts with the city
specifically state that the city has to be notified if a vendor is even
considering paying a bonus and explain why. This was not done.

“On the Inside” initially reported on Drummonds and
the NMPP in April 2014,revealing that
Drummonds tried to cover up his hiring of career criminal Daniel Rodriguez —
without conducting a background check — as a case manager. Rodriguez preyed upon the women he was hired to help,
fathering a child with one and nearly costing another her children to foster
care, as DNAinfo previously reported.

3.A former Deschutes County sheriff’s captain has
pleaded not guilty in U.S. District Court in Eugene (OR) to charges related to
the alleged theft and embezzle­ment of more than $200,000 in taxpayer funds.

4.The owners of Racetrack Bingo (FL) in Fort Walton Beach have been
charged by federal authorities with conspiracy to commit fraud, illegal
gambling and the theft of millions of dollars from local charities. An
indictment summarizes charges against Larry and Dixie Masino. The indictment states the Masinos conspired to obtain
approximately $5.8 million in “criminally derived property” by defrauding a
coalition of charities through exorbitant rent and fees for the use of their
bingo hall.

5.The head of a purported charity with close ties to Florida
U.S. Rep. Corrine Brown pleaded guilty in a federal fraud investigation. One
Door for Education Foundation Inc. (VA) President Carla Wiley pleaded guilty to
one count of conspiracy to commit wire fraud and agreed to testify in the
larger ongoing case. Potential donors
attending a golf tournament received letters from One Door with Brown's
signature and official House seal asking them to give from $125 up to $20,000
to One Door. Authorities say no charities received any of the money raised.
Wiley transferred herself tens of thousands of dollars, including $16,000 for
making payments on two vehicles registered in her name. The money was also used
to fund lavish parties, an NFL luxury box and other extravagances in
Washington, according to the plea agreement.

6.Cary Lee Peterson — the creator of a purportedly pro-Bernie
Sanders super PAC thatcollected
nearly $50,000from “James
Bond” actor Daniel Craig — wasarrested
Sunday in San Francisco by the FBI and charged with securities
fraud, Department of Justice officials announced.
Peterson “defrauded investors by issuing false filings and press releases
touting its purportedly lucrative — but wholly fictitious — business deals,” according
to one of the government’scomplaints
against him.

7.Three years after
a judge showed him mercy in a corruption case, ex-Pontiac school official
Jumanne Sledge appeared before that same judge, begging for a second chance. He
had violated the terms of his probation and feared going to prison, so
much that he was shaking in court all afternoon, his lawyer noted. Too bad,
countered the prosecutor, who shot back: "He wasn't shaking when he took
the half a million dollars from ailing schools. ... I think incarceration is in
order."

Nonprofit
Imperativegathers
its information principally from media sources...some of which are directly
quoted. Virtually all cited are in some phase of criminal proceedings; some
have not been charged, however there is money missing. These incidents include
only a fraction of the estimated $40 billion of charity crimes. On rare
occasions, there may be duplicates.

Gary
Snyder is the author of Silence: The Impending Threat to the Charitable
Sector (Xlibris, June, 2011) and Nonprofits: On the Brink
(iUniverse, February, 2006) and articles in numerous publications. The book can
be bought at amazon.com,barnesandnoble.com, Barnes and Noble (store)

About Me

Gary Snyder is the author, most recently, of the groundbreaking expose on the charitable sector, Silence: The Impending Threat to the Charitable Sector as well as the often-cited guide on best practices and key concepts, Nonprofits: On
the Brink.

He is the publisher of a
twice-monthly newsletter, Nonprofit Imperative that gives an update on the current status of the
charitable sector.

Snyder is often quoted and frequent contributor to the blog of the National
Committee for Responsive Philanthropy. Snyder twiceauthored the Governance Chapter of the Michigan
Nonprofit Management Manual (4th and 5th editions).

He is a speaker on ethics,
financial and governance matters of the sector. For almost a decade, Snyder is frequently
consulted by Congress and has been quoted in print, broadcast and online media
outlets.